Sunday, August 22, 2010

Senate Minority leader Mitch McConnell (R-KY) could not give a straightforward answer to the simple question from David Gregory of Meet the Press: how are we going to pay for continued Bush tax cuts for the wealthy? McConnell could not conceive of the fact that tax cuts are paid for and add to the deficit:

McConnell: What are you talking about, paid for? This is existing tax policy. It’s been in place for ten years. [...]

Gregory: For a final time, I’ll go back to my question which is, the extension of the tax cuts would cost $3.2 trillion. That’s borrowed money, that adds to the deficit. Do you have a plan to pay for that extension?

McConnell: You’re talking about current tax policy. Why did it all of a sudden become something that we, quote, ‘pay for’? (h/t Think Progress)

Note that Gregory shows a video in which Alan Greenspan, former chairman of the Federal Reserve, states that tax cuts are unjustifiable if paid for with borrowed money. Of course, McConnell is so disconnected from basic economics that he can not acknowledge that the money is borrowed. In addition, McConnell's contention that raising taxes on the top two brackets will "affect 50 percent of small business income" is simply false. According to the non-partisan Joint Committee on Taxation, McConnell is overestimating the impact by at least 47 percent:

Analyses from the Joint Committee on Taxation and the Tax Policy Center, a nonpartisan research organization, show that less than 3 percent of filers with small-business income pay at the top two income tax rates, and many of those are doctors and lawyers in partnerships.